Hello and Happy New Year! Let’s all hope that our nation and the rest of the world continue to make progress against Covid and that fewer people get sick and fewer still die from the awful disease. That said, we are not off to a great start. Anecdotally, it seems like a lot more people are getting sick with Covid over the past 4 weeks or so – more than even a year ago. I don’t trust the official numbers at all because test results taken at home don’t have to be reported, and because asymptomatic people who have Covid may choose not to take a test at all. Fortunately, due to having been vaccinated and also to the potential lower virility of current versions of the virus, the percentage of people getting very sick seems to be lower.
Full Rose Bowl
Despite the “tsunami” of new Covid cases, even among the already vaccinated, state and local governments don’t seem to be panicking – yet. Case in point: The Rose Bowl stadium on New Year’s Day was full an rollicking, entertained by the outstanding game between the red hued teams of Ohio State and Utah. To state the obvious, the Rose Bowl is in California, home to some of the most stringent Covid standards during the first 12 or so months of Covid. Remember the days of the Red, Purple, and Orange Tiers? And the complicated mathematics that went behind placement into one of those tiers, which then dictated what activities citizens could or could not do? Despite all of the recent bad Covid news, even California has not yet resurrected its Tier mathematics. Restaurants are not being forced to forego indoor dining, and except for mask wearing, life goes on pretty normally here in the Golden State. Had the old Tier metrics remained in place during this current Covid surge, I can’t imagine that the State would have allowed the Rose Bowl – and the parade, of course – to be held. Perhaps the State health authorities held their collective breath and looked the other way, because there is no “social distancing” in the Rose Bowl, but kudos to them for allowing some normalcy to take place.
California is not alone. So far, there do not seem to be wholesale cancellations and closures throughout the US. While some colleges are going remote for a short time at the beginning of the Winter/Spring term, most primary schools are open for business, although teachers are sick. Private sector companies are perhaps delaying back-to-the-office plans but they are not closing down. Unemployment has not spiked, at least not yet. On the contrary, worker shortages due to Covid or due to other reasons seem to be the larger problem. Mask mandate that have been put in place have often come with end-dates, which of course could be changed, but at least they appear temporary.
Fears Not Realized
Back in late November/early December 2021, when the Omicron variant was new, the stock market sold off, with the S&P 500 down about 5% at that time. The reason given for the sell-off was not concern that people would get sick from Covid, but that governments would overreact and revisit the shutdown policies that they had previously enacted. So far, these fears have not been realized. Governments have so far kept out of the way and have let the current Covid wave play out. The results have been that the health care sector is busy but not overwhelmed, and our economy has been transacting more or less as usual. Investors have liked what they have seen so far: the 5% correction became a buying opportunity, and the S&P 500 Index is back up at a new all-time high.
It’s not pretty if you contract Covid, but these variants seem to play out over a 6 to 8 week period. It seems like governments are realizing this and are not using their biggest weapons just yet. If the 6 to 8 week life holds true to this Omicron variant, and data from other countries suggest that it will, then I believe those big weapons will remain in the arsenal but not deployed. The worst stories with this variant will be about those who got sick or worse, and fortunately not with the economy that was forced to shut down and jobs that were lost as a result.